Overview of Enterprise Digitalization Platforms in 2023 – Part 1

Onespire Ltd.

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A fundamental question related to digitalization projects

In this series of articles, we will attempt to cover the digitalization challenges and opportunities that companies face daily.

Digitalization is an important, prominent topic of our current IT orientation efforts, and most ongoing projects are labelled with this tag. The supply on the market is relatively large, the opportunities are given, and the need is evident, but the overwhelming success is still yet to come.

So, the legitimate question is obvious, why did it happen this way?

For the answer, it is worth looking a little deeper into the issue, to understand what steps are successful and why many initiatives promising high added value fail.

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Digitalization concerning the ERP system implementations in the Hungarian market

If we look a little beyond the narrow scope of digitalization and view the corporate IT organization in general, we will get answers to many questions.

In the last 10-15 years, the Hungarian corporate sector has developed enormously regarding ERP products. The previous extremely low penetration in enterprise resource planning has grown significantly. This market also has its peculiarities and difficulties. Still, with a slight generalization, it can be stated that the improvement brought significant changes primarily in the general ledger and financial processes, and secondarily in warehousing and logistics. This upsurge had a minor impact on the rest of the company’s processes, which dominated their number. This upsurge has less impacted the other, more numerous segments of business processes.

Setting aside the ‘is the glass half-empty or half-full” dilemma, it can be seen that the increase in the implementation of ERP systems has significantly drained the resources of the concerned Hungarian companies. Implementing a single ERP solution, or even a version change, has exhausted the resources dedicated to digital development, pushing all other requests to the back of the queue. It is not the lack of intention or determination, but the available resources. In international comparison, the quantifiable amount of resources and funding per user in the Eastern European region is still a fraction of the leading economies on the continent.

To run a company efficiently, an enterprise resource planning system is needed. This provides a reliable source of data for daily decision-making. The ERP market has its actors and products, most of which are solutions to significant international concerns with varying degrees of local support and localization quality. As a CEO, it is challenging to choose outside of these solutions. Although excellent ERP systems are developed domestically, rationality points in the direction of the products of large international manufacturers.

The other side of the coin is that these enterprise resource planning solutions are expensive compared to the profit-generating ability of domestic companies. Proportionally, they take a much larger share of the company’s available resources than to the west of Hungary. As a result, digitalization tasks have to be solved with much less money.

Digitalization solutions are on the rise and fading away

It’s worth taking a look back at the history of digitalization. Countless solutions have come across the horizon of digital information management and then quietly disappeared. Over the last twenty years, nearly two dozen solutions have been the star of conferences and professional posts. Many companies have bought them in various forms, but the digital breakthrough is yet to happen.

In many cases, large enterprises are already replacing these software solutions with products having a better reputation or trendier image now, to maintain at least the level of digitalization at the organization they have achieved earlier.

Digitalization in the light of Hungarian realities

In this respect, it is interesting to note that the domestic market is more dominated by local digitalization solutions, due to the price of market-leading products that align with international trends. Typically, many isolated, multi-platform small applications cover the business requirements that the more powerful large enterprises cover with one of the more unified platforms.

In retrospect, given the realities of opportunities and resources, we believe this was the best decision that could have been made for Hungarian companies, because what was built contributed to the companies’ growth.

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The state of corporate digitalization abroad

From the above reasoning, it is clear that financial constraints severely limit the digitalization of business processes in Hungary, but why is there no breakthrough even where there are resources for this?

The answer lies in the diversity of business processes important for digitalization. Some operations can be digitalized on a template basis, and others that are unique. But mostly, these two statements are accurate at the same time.

In addition to the central business processes dominated by ERP systems, day-to-day operations comprise many smaller sub-processes. Digitalizing these presents several significantly different challenges for business leaders.

In the second part of this article series, we explore the opportunities for improvement.

Do you have questions about digitalization in your company, optimizing existing solutions or introducing new systems?

Contact our enterprise digitalization experts now!